Minnesotans find a sunny place for business

Erik Kellar, Special to the Star TribuneMike Schumann, co-owner, with his wife, Suzanne, of Traditions Classic Home Furnishings, outside the Naples, Fla., store. A big share of their Florida business comes from Minnesotans with second homes in the Naples area.

Naples, Fla. – It starts during spring break or a hastily scheduled winter escape. Minnesota entrepreneurs land on a far-flung beach to spend their vacation soaking in rays and margaritas.

But as departure closes in and thoughts of returning to snow and cold disturb the calm, the thought bursts forward like a WaveRunner: “Why not go into business right here?”

That’s what happened to Mike and Suzanne Schumann, who own Traditions home furnishings stores in St. Paul, St. Louis Park — and Naples. During an especially cruel April snowstorm in 2002, the Schumanns took the long-ignored advice from friends to check out the small city on the Gulf of Mexico.

“Within a week we were looking at homes,” Suzanne Schumann said. “The following weekend we were looking for a store location.”

The Schumanns are part of a motivated, affluent group of Minnesota business people who have gone to Naples to lie in the sun and instead found a business opportunity. Some opened a satellite location, while others have made southwest Florida their primary business focus.

Suzanne Schumann in the slightly chillier air outside the St. Louis Park store.

Then there are the service businesses that don’t require a storefront. Minnesota entrepreneurs from law firms, PR agencies, and investment companies have discovered they can meet clients’ needs from Florida via e-mail, telephone and Skype.

In fact, the Minnesota contingent is large enough to support a Minnesota breakfast club that has been meeting every Friday for 49 years. The informal group attracts about 250 people each week to its breakfasts to socialize, network and revel in cold weather updates from home.

Expanding a business in Naples is an unintentional twist for most. “First they like it so much that they’re thinking about buying a home or condo,” Mike Schumann said. “After a season or two they’re looking for a business location or setting up a home office.”

Nearly 3,000 Minnesota snowbirds migrate to Naples each year, according to longtime Florida resident and dual-state businessman David Dorle.

Although many are short-term vacationers, about 1,500 residents of Collier County, which includes Naples, own property and have their property tax statements sent to Minnesota, according to Collier County records. In the compact, well-heeled hamlet of 22,000, the concentration of Minnesotans stands out, compared with sprawling hot spots such as Phoenix or even Palm Desert.

The Minnesota connection has been a boon for Naples businesses. Minnesota customers make up about 50 percent of the business at Traditions’ Naples location.

“We’re tapping into Minnesota customers with second homes here,” Mike Schumann said. “You can only golf so much, so we get a lot of the recreational shoppers,” he said.

Last year, the Naples store had its best year since it opened in 2002.

Jack Farrell opened a Haskell’s wine shop several years after he bought a house in Naples in 1997. It was a terrific market at first, he said. Then the fine wine market collapsed in 2007-08, and Farrell closed the store last year. Until then, about 40 percent of his customers were Minnesotans, Farrell said.

Having thousands of Minnesota snowbirds in a concentrated area offers businesses instant name recognition. “I see more Minnesotans I know in an afternoon in Naples than I see in Minneapolis in a week,” said Farrell, chairman and CEO of Haskell’s wine stores, which has 13 Minnesota locations.

Residency also makes for a warmer tax climate, since Florida has no personal income tax. Minnesotans can avoid state income tax entirely if they live in Florida for six months and one day per year, a policy that Gov. Mark Dayton proposed changing.

‘Decidedly Midwestern’

When Dorle, of Dorle Communications in Minnetonka, started vacationing in Florida in 1992, he considered forwarding the calls of his marketing and advertising clients. But he and his wife worried that clients would not appreciate their “working” in the land of umbrella drinks and warm breezes.

So they asked them. “They didn’t care as long as we got the job done,” he said.

Dorle soon began getting Florida business after networking some Minnesota connections in Naples at the Breakfast Club.

John Allen, CEO of Industrial Equities commercial real estate investment company in Minneapolis, said the area boasts a high level of culture and resident education, plenty of success stories and philanthropic giving, despite far fewer residents.

Allen admits that Naples’ winter advantages do take a toll on a long-distance business. “If I were in Minnesota all the time I could be 25 percent more efficient,” he said.

Twin Cities über-restaurateur Richard D’Amico became a resident several years ago to increase his efficiency. With four locations in the Naples area, the business needed one partner to watch over it, he said.

He opened a D’Amico & Sons in 1996, Campiello in 1997, Lurcat in 2002 and Masa last year. Two D’Amico & Sons locations have closed, but Campiello continues to enjoy success as one of Naples’ most popular eateries. It generates twice the revenue of the company’s second-best revenue generator, Lurcat in Minneapolis, D’Amico said.

Although the Twin Cities restaurants and catering business make up two-thirds of total revenue, the company’s future growth lies in South Florida. “There’s a point in Minneapolis where if you open more restaurants you’re just stealing from yourself,” he said. “We’re looking at Miami.”

Legal transplants

Other expatriates have planned a slower transition to a business in Naples. Jay Cook, a real estate lawyer formerly with Dorsey & Whitney, has been traveling to Naples for 25 years, working with Minnesota clients via electronic communication.

He started his own commercial real estate practice in Naples in 2007. Referrals from existing clients, many of them Midwestern, kept the doors open during a slow time in the real estate market.

“My business plan was to leverage the network I have in Minnesota and the contacts from Naples,” he said.

Principals from another major Minnesota law firm, Robins, Kaplan, Miller & Ciresi, also opened an office in Naples because of the high number of Minnesotans there, said partner Elliot Kaplan.

“We’re not residents,” Kaplan said. “We just use it as a place for Minnesotans who have issues here.”

Many professionals find working remotely relatively seamless. They can continue to work with clients back home, and if they plan to establish residency in Naples they can cultivate new clients in Florida.

That’s what Bob Ritter, a ReMax Results Realtor in Wayzata, is doing. He and Mary, his wife and business partner, have had a second home in Naples for 15 years.

Although neither is yet affiliated with a broker in Naples, they educate Minnesotans who want to buy a second home there about neighborhoods, home maintenance and types of homes. They plan to “semi-retire” in Florida, getting licensed and affiliated to sell homes and live there for six months to establish residency.

Suzanne Schumann, from Traditions home furnishings, said the Minnesota-Naples connection still surprises some longtime vacationers.

“People go to Traditions or Campiello in Naples and talk about the coincidence of a similar place by the same name back home. It happens every single day,” Schumann said. “They don’t know there’s a connection until we tell them.”

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